Aracruz, Stora Enso Postpone Veracel Expansion Project
March 20, 2009 - Aracruz Celulose and its joint venture partner Stora Enso said that a decision has been made to postpone expansion plans for the JV's Veracel pulp mill in Bahia, Brazil for at least one year.
Aracruz said its portion of capital expenditures scheduled for 2009 (R$ 75 million) will be canceled, including the purchase of land, the formation of forests and a feasibility study.
Aracruz said the postponement is the result of weakness in the current and short term market outlook.
The Veracel II project involves construction of a second pulp production line with a design capacity of about 1.4 million tons per year.
Veracel, an equal joint venture of Aracruz and Stora Enso, is a one million tons per year bleached eucalyptus pulp mill located in the municipality of Eunapolis, in the south of Bahia.
The USD 1.25 billion mill started up in the second half of 2005.
SOURCE: Aracruz Celulose